Print Page  |  Close Window

Press Releases

ICC Holdings, Inc. Reports 2018 Fourth Quarter and Year-End Results

ROCK ISLAND, Ill., Feb. 25, 2019 /PRNewswire/ -- ICC Holdings, Inc. (NASDAQ: ICCH) (the Company), parent company of Illinois Casualty Company, a regional, multi-line property and casualty insurance company focusing exclusively on the food and beverage industry, today reported preliminary, unaudited results for the fourth quarter and twelve months ended December 31, 2018.

FOURTH QUARTER AND TWELVE MONTHS ENDED DECEMBER 31, 2018 – FINANCIAL RESULTS

Net earnings totaled $635,000, or $0.21 per share, for the fourth quarter of 2018, compared to $443,000 or $0.14 per share for the fourth quarter of 2017. For the twelve months ended December 31, 2018, the Company reported net earnings of $893,000, or $0.29 per share, compared to $708,000, or $0.22 per share, for the same period in 2017.

Direct premiums written grew by $1,399,000, or 10.6%, to $14,543,000 for the fourth quarter of 2018 from $13,144,000 for the same period in 2017. For the twelve months ended December 31, 2018, direct premiums written grew by $7,455,000, or 13.9%, to $61,125,000 from $53,670,000 for the same period in 2017. Net premiums earned grew by 6.3% to $12,197,000 for the fourth quarter of 2018 from $11,473,000 for the same period in 2017. Net premiums earned grew by 6.6% to $47,117,000 for the twelve months ended December 31, 2018, from $44,213,000 for the same period in 2017.

For the fourth quarter of 2018, the Company ceded to reinsurers $2,811,000 of earned premiums, compared to $1,956,000 of earned premiums for the fourth quarter of 2017. For the twelve months ended December 31, 2018, the Company ceded $10,759,000 of earned premiums to reinsurers compared to $7,948,000 of earned premiums for the same period in 2017.  

Net realized investment losses net of other-than-temporary impairment losses were $127,000 for the fourth quarter of 2018 compared to gains of 622,000 for the same period in 2017, respectively. For the twelve months ended December 31, 2018, net realized investment gains net of other-than-temporary impairment losses, decreased by $48,000 to $960,000 from $1,008,000 for the same period in 2017. For the three and twelve months ended December 31, 2018, the decrease resulted from liquidating common stock holdings that no longer fit with our investment objectives and resulted in a realized loss during the fourth quarter of 2018.

Net investment income decreased by $17,000, or 2.2%, to $766,000 for the fourth quarter of 2018, as compared to $783,000 for the same period in 2017. For the twelve months ended December 31, 2018, net investment income grew by $258,000, or 9.8%, to $2,890,000 from $2,632,000 for the same period in 2017. The growth in net investment income for the twelve months ended December 31, 2018, was primarily due to investing the IPO proceeds for the entire year in 2018 as compared to a partial year in 2017.

Losses and settlement expenses decreased by $619,000, or 8.3%, to $6,864,000 for the fourth quarter of 2018, from $7,483,000 for the same period in 2017. Losses and settlement expenses increased by $2,252,000, or 7.8%, to $31,262,000 for the twelve months ended December 31, 2018, from $29,010,000 for the same period in 2017. Although the Company experienced increased weather-related loss activity, Businessowners Property results improved $2,208,000 for the twelve months ended December 31, 2018, compared to the same period in 2017. Losses and settlement expenses increased for the twelve months ended December 31, 2018, primarily due to weaker Businessowners Liability.

Policy acquisition costs and other operating expenses increased by $617,000, or 13.7%, to $5,126,000 for the fourth quarter of 2018 from $4,509,000 for the same period in 2017. Policy acquisition costs and other operating expenses increased by $907,000, or 5.2%, to $18,215,000 for the twelve months ended December 31, 2018, from $17,308,000 for the same period in 2017. The primary drivers are an increase in direct commission expense associated with the increase in direct written premium coupled with an increase in self-funded employee medical expenses of $535,000 for the twelve months ended December 31, 2018, as compared to the same period in 2017. While total policy acquisition costs and other operating expenses were up for the twelve months ended December 31, 2018, the expense ratio is down for the same period as referenced below.

Total assets decreased by 1.3% from $152,335,000 at December 31, 2017 to $150,283,000 at December 31, 2018. Our investment portfolio, which consists of fixed maturity securities, common stocks, preferred stocks, and property held for investment, decreased by 0.5% from $105,133,000 at December 31, 2017, to $104,565,000 at December 31, 2018.

FOURTH QUARTER AND TWELVE MONTHS ENDED DECEMBER 31, 2018 – FINANCIAL RATIOS

The Company's losses and settlement expense ratio (defined as losses and settlement expenses divided by net premiums earned) was 56.3% and 66.3% in the fourth quarter and twelve months ended December 31, 2018, respectively, compared with 65.2% and 65.6% in the same periods of 2017.

The expense ratio (defined as the amortization of deferred policy acquisition costs and underwriting and administrative expenses divided by net premiums earned) was 42.0% and 38.7% in the fourth quarter and twelve months ended December 31, 2018, respectively, compared to 39.3% and 39.1% in the same periods of 2017.

The Company's GAAP combined ratio (defined as the sum of the losses and settlement expense ratio and the expense ratio) was 98.3% and 105.0% in the fourth quarter and twelve months ended December 31, 2018, respectively, compared to 104.5% and 104.8% in the same periods of 2017.

MANAGEMENT COMMENTARY

"I am pleased to report improved results for this past quarter.  As stated above, we had a quarterly combined ratio below 100 for the first time since the first quarter of 2017. The Company experienced improved loss experience due to improved Workers' Compensation results and continued stability in the Liquor Liability line of business.  Partially offsetting these results were continuing challenges in the Businessowners line of business. The Company recognized improved patterns in the closing of claims, whereby reserves are reaching ultimate faster. This reduced the amount of additional reserve needed for incurred but not reported claims at the end of 2018. We recognize the need to further strengthen the adequacy of rates in the Businessowners line and streamline operations for expense savings. These efforts will continue into 2019. The Company experienced loss activity related to the polar vortex in the Midwest during the first quarter of 2019, negatively impacting property results. I am excited about the future of ICCH and the quality book of business that we continue to build," stated Arron Sutherland, President and Chief Executive Officer.

EARNINGS CONFERENCE CALL

The Company will hold a conference call on March 15, 2019, at 10:30 a.m. CT to discuss results for the fourth quarter and twelve months ended December 31, 2018.

Teleconference:

Dial-in information for the call is 1-866-595-5224 (toll-free) or 1-636-812-6497, passcode 4856807.

ABOUT ICC HOLDINGS, INC.

ICC Holdings, Inc. is a vertically integrated company created to facilitate the growth, expansion and diversification of its subsidiaries in order to maximize value to its stakeholders.  The group of companies consolidated under ICC Holdings, Inc. engages in diverse, yet complementary business activities, including property and casualty insurance, real estate, and information technology.

The Company's common shares trade on the NASDAQ Capital Market under the ticker symbol "ICCH". For more information about ICC Holdings, visit http://ir.iccholdingsinc.com.

FORWARD-LOOKING STATEMENTS

This press release, and oral statements made regarding the subjects of this release, contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, or the Reform Act, which may include, but are not limited to, statements regarding the Company's, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts, including statements identified by words such as "believe," "plan," "seek," "expect," "intend," "estimate," "anticipate," "will," and similar expressions. All statements addressing operating performance, events, or developments that the Company expects or anticipates will occur in the future, including statements relating to revenue and profit growth, product and segment expansion, regulatory approval in connection with expansion, and market share, as well as statements expressing optimism or pessimism about future operating results, are forward-looking statements within the meaning of the Reform Act. The forward-looking statements are based on management's current views and assumptions regarding future events and operating performance, and are inherently subject to significant business, economic, and competitive uncertainties and contingencies and changes in circumstances, many of which are beyond the Company's control. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not undertake any obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

Although the Company does not make forward-looking statements unless it believes it has a reasonable basis for doing so, the Company cannot guarantee their accuracy. The foregoing factors, among others, could cause actual results to differ materially from those described in these forward-looking statements. For a list of other factors which could affect the Company's results, see the Company's filings with the Securities and Exchange Commission, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," including "Forward-Looking Information," set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. No undue reliance should be placed on any forward-looking statements.

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets










As of



December 31,


December 31,



2018


2017



(Unaudited)




Assets







Investments and cash:







Available for sale securities, at fair value







Fixed maturity securities (amortized cost - $89,252,906 at


$

88,981,159


$

89,605,073

12/31/2018 and $87,773,047 at 12/31/2017)







Common stocks¹ (cost - $13,572,713 at



11,843,223



8,534,109

12/31/2018 and $7,631,180 at 12/31/2017)







Preferred stocks (cost - $0 at





3,867,429

12/31/2018 and $3,783,311 at 12/31/2017)







Other invested assets



154,200



Property held for investment, at cost, net of accumulated depreciation of



3,586,273



3,126,566

$222,825 at 12/31/2018 and $127,161 at 12/31/2017







Cash and cash equivalents



4,644,784



6,876,519

Total investments and cash



109,209,639



112,009,696

Accrued investment income



648,321



687,453

Premiums and reinsurance balances receivable, net of allowances for



21,404,344



19,013,262

uncollectible amounts of $50,000 at 12/31/2018 and 12/31/2017







Ceded unearned premiums



796,065



274,972

Reinsurance balances recoverable on unpaid losses and settlement expenses,



6,735,964



10,029,834

net of allowances for uncollectible amounts of $0 at 12/31/2018 and 12/31/2017







Current federal income taxes



847,271



573,147

Net deferred federal income taxes



1,021,398



349,258

Federal income taxes



1,868,669



922,405

Deferred policy acquisition costs, net



5,247,188



4,592,415

Property and equipment, at cost, net of accumulated depreciation of



3,332,810



3,503,904

$5,099,090 at 12/31/2018 and $4,896,041 at 12/31/2017







Other assets



1,040,193



1,301,420

Total assets


$

150,283,193


$

152,335,361

Liabilities and Equity







Liabilities:







Unpaid losses and settlement expenses


$

51,447,440


$

51,074,126

Unearned premiums



29,972,623



26,555,582

Reinsurance balances payable



993,004



327,483

Corporate debt



3,484,606



4,339,208

Accrued expenses



4,536,218



4,274,002

Other liabilities



1,256,003



1,663,415

Total liabilities



91,689,894



88,233,816

Equity:







Common stock2



35,000



35,000

Treasury stock, at cost3



(2,999,995)



Additional paid-in capital



32,505,423



32,333,290

Accumulated other comprehensive (loss) earnings, net of tax



(1,580,976)



2,227,069

Retained earnings



33,680,702



32,787,406

Less: Unearned Employee Stock Ownership Plan shares at cost4



(3,046,855)



(3,281,220)

Total equity



58,593,299



64,101,545

Total liabilities and equity


$

150,283,193


$

152,335,361



1

At December 31, 2018, common stock securities consist primarily of individual common stocks. At December 31, 2017, common stock consisted of exchange trade funds (ETF) made up primarily of Dividends Select and the S&P 500.500

2

Par value $0.01; authorized: 2018 - 10,000,000 shares and 2017 – 10,000,000 shares; issued: 2018 - 3,500,000 and 2017 – 3,500,000 shares; outstanding: 2018 - 2,992,734 and 2017 – 3,171,878 shares.

3

2018 – 196,721 shares and 2017 – 0 shares

4

2018 –304,685 shares and 2017 – 328,122 shares

 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)










For the Three-Months Ended



December 31,



2018


2017

Net premiums earned


$

12,197,256


$

11,472,959

Net investment income



766,207



783,077

Net realized investment (losses) gains



(111,236)



621,632

Other-than-temporary impairment losses



(16,178)



Other income



66,427



127,480

Consolidated revenues



12,902,476



13,005,148

Losses and settlement expenses



6,864,453



7,482,790

Policy acquisition costs and other operating expenses



5,125,902



4,508,621

Interest expense on debt



32,542



51,030

General corporate expenses



147,127



103,449

Total expenses



12,170,024



12,145,890

Earnings before income taxes



732,452



859,258

Income tax (benefit) expense:







Current



(238,145)



379,844

Deferred



336,023



36,701

Total income tax expense



97,878



416,545

Net earnings


$

634,574


$

442,713








Other comprehensive (loss), net of tax



(1,418,631)



(188,174)

Comprehensive (loss) earnings


$

(784,057)


$

254,539








Earnings per share:







Basic:







Basic net loss per share


$

0.21


$

0.14

Diluted:







Diluted net loss per share


$

0.21


$

0.14








Weighted average number of common shares outstanding:







Basic



2,994,775



3,167,344

Diluted



2,995,947



3,167,344

 

ICC Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited)










For the Twelve-Months Ended



December 31,



2018


2017

Net premiums earned


$

47,116,961


$

44,213,271

Net investment income



2,890,266



2,632,498

Net realized investment gains



975,993



1,064,577

Other-than-temporary impairment losses



(16,178)



(57,316)

Other income



196,649



325,127

Consolidated revenues



51,163,691



48,178,157

Losses and settlement expenses



31,262,462



29,009,833

Policy acquisition costs and other operating expenses



18,214,983



17,307,700

Interest expense on debt



140,877



225,379

General corporate expenses



545,986



555,109

Total expenses



50,164,308



47,098,021

Earnings before income taxes



999,383



1,080,136

Income tax (benefit) expense:







Current



(234,037)



197,200

Deferred



340,124



175,085

Total income tax expense



106,087



372,285

Net earnings


$

893,296


$

707,851








Earnings per share:







Basic:







Basic net earnings per share


$

0.29


$

0.22

Diluted:







Diluted net earnings per share


$

0.29


$

0.22








Weighted average number of common shares outstanding:







Basic



3,119,968



3,158,163

Diluted



3,121,140



3,158,163








Other comprehensive earnings, net of tax







Unrealized gains and losses on investments:







Unrealized holding (losses) gains arising during the period,







net of income tax (benefit) of $(810,701) in 2018







and income tax expense of $706,378 in 2017


$

(3,049,791)


$

1,371,206

Reclassification adjustment for (gains) included in net







income, net of income tax expense of $201,561 in 2018







and expense of $342,469 in 2017



(758,254)



(664,792)

Total other comprehensive earnings



(3,808,045)



706,414

Comprehensive earnings


$

(2,914,749)


$

1,414,265

 

Contact Info:

Arron K. Sutherland, President and CEO 


ICC Holdings, Inc.


(309) 732-0105


arrons@ilcasco.com


225 20th Street, Rock Island, IL  61201

 

Cision View original content:http://www.prnewswire.com/news-releases/icc-holdings-inc-reports-2018-fourth-quarter-and-year-end-results-300801693.html

SOURCE ICC Holdings, Inc.